Uganda Passes Bill to Shift Fuel Supply Dynamics, Reducing Kenyan Companies’ Influence
The Ugandan parliament enacted the Petroleum Supply Amendment Bill 2023 on Tuesday, eliminating the fuel supply hegemony of Kenyan companies in the neighboring country.
Emmanuel Otaala, chairman of the Energy Committee, explained during the bill’s debate that it would prevent Uganda from being dependent on Kenyan companies that were acting as intermediaries.
He elaborated that in the past, international corporations imported the oil, which was subsequently sold to Kenyan firms, which distributed it to numerous fuel stations in Uganda.
Otaala remarked that the decision was detrimental to its citizens because the prices of petrol would be adjusted to reflect the profits generated by both international and Kenyan firms.
Consequently, upon the ratification of the legislation, which presently awaits President Yoweri Museveni’s inauguration, Uganda National Oil Company (UNOC) shall be entrusted with the responsibility of procuring the oil directly from the refineries.
As has been the case for many years, the oil will continue to be transported via Kenya under the new strategy.
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However, the organization will also investigate alternative energy supply routes. It is worth noting that Museveni disclosed that the nation is also considering the possibility of transporting the crude via Tanzania.
“The Ministry of Energy or Kenya instituted the quantities for the Kenyan Domestic Market and for onward transit to neighboring countries at a 60:40 ratio respectively.
“In essence, all the fuel imported through Kenya is retained in the Kenyan market and Neighboring countries including Uganda, Rwanda and the Democratic Republic of Congo have to share the 40 percent allocation,” he stated.
Energy Minister Ruth Nankabirwa of Uganda stated that the enactment of the measure would eradicate the cartel-like structure that had previously dominated the sector, which would be revolutionary for the country’s citizens.
“The Bill will further enable the Government to ensure a steady supply of Petroleum Products, diversify supply routes, and also save Ugandans from fuel cartels that arbitrarily influence fuel pricing, and cause pain at the pump for citizens,” she stated.
Within the next few weeks, the ascended bill will be elevated.
Uganda Passes Bill to Shift Fuel Supply Dynamics, Reducing Kenyan Companies’ Influence